NTPC enters wind power space, partners with Inox Wind
Marking its foray into wind power generation, state-owned NTPC has partnered with Inox Wind for a 50-MW wind project to be deployed in Gujarat.
"Inox Wind Ltd... has bagged an order for a 50-mw wind power project to be deployed in the state of Gujarat from NTPC Ltd ," a press release said.
With 47 GW of capacity under operations, NTPC is the country's largest energy conglomerate and this 50 MW maiden order marks its foray into wind energy generation, the statement said.
The project is scheduled to be commissioned by first quarter of 2017-18 and will be executed on a turnkey basis.
"As part of the order, Inox Wind will supply and install 25 units of its advanced 2MW DFIG 100 rotor diameter wind turbine generators (WTGs) for NTPC," the release said.
"The 100 rotor diameter WTG has one of the highest swept areas that make it ideally suited to maximise returns, especially in low wind areas," it added.
Inox Wind's 450 MW Rojmal site is one of the largest wind farms in Gujarat. The common power evacuation infrastructure facilities at the site have already been commissioned.
"It is a proud moment for Inox Wind to partner with NTPC... to provide clean, sustainable and renewable power to our nation. With this new order, we will further reinforce our dominant market position in Gujarat as the leading wind energy solutions provider," Inox Wind CEO Kailash Tarachandani said in a statement
http://economictimes.indiatimes.com/articleshow/55958818.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
NTPC to raise Rs 3,925 crore via debentures
State-run NTPCBSE 0.82 % today said it will raise Rs 3,925 crore through issuance of debentures on private placement basis to meet its funding requirements.
"NTPC has decided to raise Rs 3,925 crore through private placement of secured non-convertible debentures at a coupon of 7.37 per cent per annum with a door to door maturity of 15 years on December 14, 2016.
The proceeds will be utilised to finance capital expenditure/refinancing the debt requirement in on-going projects and other general corporate requirements
Iron ore stocks up on less offtake, export duty
Iron ore stocks are growing at mine heads, with lower offtake while output has been rising.
Data from the Indian Bureau of Mines shows the total stock of ore at end-July was 144.5 million tonnes (mt). Of this, 85 per cent had built up in Odisha, the largest producer, and Jharkhand. Around 70 per cent of the stockpile comprises ore with content below 62 per cent, both lumps and fines, the latter being 93 per cent of this.
"Production is expanding but domestic demand is not enough to absorb it. The only outlet for the piled up ore is exports. However, the high export duty of 30 per cent on higher grade ore has hampered shipment. We have been appealing to the Union government to lift this duty, as has been done for lower grade ore", said R K Sharma, secretary general, Federation of Indian Mineral Industries (Fimi).
The 30 per cent export duty was removed in the 2016-17 Union Budget for lower grade ore (iron content less than 58 per cent). This has boosted its export from Goa where is hardly any value addition. Odisha and Jharkhand, with comparatively richer ore, continue to suffer. Almost all the iron ore mines in the two states are in the hinterland, away from the ports. Non-lifting of ore had resulted in piling up of almost 84 mt at mine heads in Odisha and 38.85 mt in Jharkhand by end-July.
Ore prices have risen abroad, powered mainly by China's stimulus. "With the bouncing back of prices, we have been able to recover a little more than the cost of production but the effect is nullified by the 30 per cent export duty," said an official with a standalone mining company.
In 2015-16, the country produced 156 mt of iron ore; net domestic demand was 112.4 mt. Exports were lacklustre at 4.5 mt; leading steel companies, mainly JSW Steel, imported 7.1 mt of ore in 2015-16.
Odisha's chief secretary has already written to the Union mines ministry, pleading for lifting the 30 per cent export duty, to stop the growing stockpile. Fimi has been lobbying similarly.
Massive Mongolia coal deposits could revive its flagging economy
Former frontier market darling Mongolia has had a tough time in a world of low commodity prices, with its government struggling to make ends meet, but a spike in global coal prices could see the country stage a comeback.
The mineral-rich country had seen double-digit economic growth as high as 17.3 percent in 2011 at the height of the mining industry boom. Subsequent declines in global commodity prices eroded those gains, with ratings agency Moody's predicting 2016 growth to be flat and only a 1 percent uptick in 2017.
But following reforms in China this year to rein in overproduction, and growing demand in Asia Pacific, coal prices soared. In November, Reuters reported premium coking coal prices in Australia had jumped to $289.30 a metric ton, up from about $85 at the beginning of June. Coking coal is a key component in steel production.
The recovery in prices has spurred Mongolia's hopes for a complex restructuring of the Tavan Tolgoi coal mine in the South Gobi desert, a move that would settle outstanding debt to Chinese aluminum producer Chalco Group. An end to the Tavan Tolgoi upset would make it easier to invite new investors such as Chinese state-owned firm Shenhua Group to help ramp up production and shipments to key market China at better prices.
"Nothing has changed on the Mongolian side of the border, in terms of quality of the coal, the availability (and) the low production costs," Layton Croft, an independent director at Mongolian real estate business Asia Pacific Investment Partners, told CNBC.
"In some cases, the ability to add value by washing the coal and, of course, the short transpiration distances are competitive advantages for Mongolian producers."
The development of Tavan Tolgoi, which contains 7.4 billion ton of coking and thermal coal deposits and is largely untapped, hit a series of political and economic roadblocks over the past few years, but the July election of the Mongolian People's Party is expected to ease the way forward.
To be sure, global coal demand is expected to remain sluggish, according to an International Energy Agency forecast released this month, noting while China aims to curb production it also is looking at to further develop other power sources.
Potential $3 billion revenue source
Mongolia's government on Friday held an initial meeting with a private consortium, led by Shenhua, which is in talks to take over development of the Tavan Tolgoi mine from the Mongolian state-owned company Erdenes Tavan Tolgoi JSC (ETT).
ETT owns six mining licenses, including one in the Tsankhi section of the Tavan Tolgoi mine that has coking coal deposits, but the company has been saddled with outstanding debt to Chalco. In 2011, the company borrowed $350 million from Chalco and agreed to repay the debt in the form of coal deliveries, according to Reuters. Because ETT is the largest miner in the country, this deal has meant much of Mongolia's coal exports have been unable to benefit from a resurgence in coal prices.
Under the agreement with Chalco, Mongolia was selling coal at $33 a metric ton, significantly lower than international average selling prices, according to Nick Cousyn, chief operating officer BDSec Joint Stock Company, a Mongolian brokerage,
With ETT representing a majority of Mongolia's current coal production, private companies have to contend with these low coal prices. "They are effectively being crowded out by the government," Cousyn told CNBC by phone.
He said Mongolia was missing out $70 a metric ton, or about $2 billion, in potential revenue if it produced about 30 million tonnes of coal on the assumption coking coal sold for $100 a metric ton on average. For Mongolia's $12 billion economy, that is a significant amount.
A representative from ETT told CNBC by email the key focus of the negotiations between the Mongolian government and the Shenhua-led consortium was to come up with a holistic approach to fix current underlying issues.
"For ETT, it means to fix its heavily discounted unwashed coal export and to regain commercial freedom through the economics of washing the coal and mining at both East and West Tsankhi," the spokeswoman said. She added that ETT expected to pay off its remaining $96 million debt to Chalco by the end of fiscal 2016.
Commentators said the new operating model would unlock the mine's ability to increase its production level and sell at a higher price.
It would also lead to infrastructure investments in Mongolia, including the development of a railway that could link into the Chinese rail network and deliver coal to destinations throughout China.
The latter benefit, Cousyn said, could ensure the Chinese still bought Mongolian coal even if prices went up, by easing the route of supply.
Under the current agreement with ETT, Cousyn said only inner Mongolia - an autonomous, northern region in China - benefited from the lower coal prices because shipments arrived across the border on trucks and was unloaded there for industrial use.
"What China wants is a much (bigger) access to natural resources globally at the lowest possible price," he said.
A road beset with obstacles
Still, politically Mongolia irked China in November after Tibetan spiritual leader the Dalai Lama visited Ulaanbaatar, the country's capital. In response, Reuters said China imposed new fees on commodity shipments at the crossing at Gashuun Sukhait, which is used to export copper from the Rio Tinto-run Oyu Tolgoi mine and coal from Tavan Tolgoi.
Meanwhile, the country's short-term economic outlook is expected to remain depressed due to a drop in private consumption and negative impact of exports, according to Moody's analyst Mathias Angonin. He told CNBC by phone the benefits from the development of Tavan Tolgoi will only be realized beyond 2020, when growth is expected to hit 8.6 percent.
In the interim, the government has outstanding bonds that are set to mature in 2017, 2018 and 2022, including a $580 million maturity due in March 2017. The bond was issued by the Development Bank of Mongolia, with a government guarantee.
"We think the government will have to bear the refinancing risk for that bond and the modes of financing are not ascertained yet," said Angonin.
Moody's recently downgraded the Mongolian government's rating to Caa1 from B3, a high credit risk rating, citing increased uncertainty over the government's ability to meet its debt obligations in the near term.
The ratings agency said as of September 2016, the country's foreign reserves had fallen to a 7-year low of $1.1 billion. In 2018, the government has a bond repayment of $500 million in January, followed by a 1 billion yuan ($145 million) maturity in the same year, according to Moody's.
"The prospects are very favorable in the (Mongolian) mining sector, but the timing is uncertain."
http://www.cnbc.com/2016/12/13/mongolia-economy-could-get-boost-from-higher-coal-pricestavan-tolgoi-mine-restructuring.html
Morgan Stanley bearish on iron ore, bullish on base metals
Base metals win out over bulks as Morgan Stanley's top picks for next year as President-elect Donald Trump's plans to spruce up US infrastructure may reinforce demand from China, with the outlook in the US offering potential for what the bank termed as the "American phoenix".
"Mr Trump's promise to rebuild US infrastructure is a brand-new upside risk for our commodity outlook," the bank said in a December 12 report. "Yes, we do believe China is in the mature stage of its 25-year-old materials growth cycle, and that the US may only be at the start of a new one. But the potential exists for a medium-term competitive overlap for selected commodities."
Metals have rallied 27 per cent in 2016, with the LMEX Index heading for the first annual gain in four years, as consumption in China proved resilient and Trump's win boosted speculation about the outlook for demand. Morgan Stanley cautioned the details of his infrastructure plans remained lacking, saying the market should be able to fully adjust for this potential growth driver once a quantified and properly-funded program is actually released.
"Most of the base metals are back at the top of our list," analysts including Tom Price, Joel Crane and Susan Bates said in the report, listing zinc, nickel and aluminium as the leading picks, with iron ore, thermal coal and metallurgical coal least-favoured. "We are bears on toppy bulks: iron ore, coals, manganese ore are all reporting supply-side responses to high prices.
The bank raised its 2017 forecast for zinc by 16 per cent to $US2728 a tonne, nickel by 13 per cent to $11,657 a tonne, aluminum by 10 per cent to $US1786 a tonne and copper by 13 per cent to $US5346 a tonne. While the iron ore forecast for next year was raised 16 per cent to $US58 a tonne, that compares with Monday's price in Qingdao of $US83.58, up 92 per cent in 2016. Iron ore slipped to $US83.42 on Tuesday.
Zinc traded at $US2729 a tonne on the London Metal Exchange at 3.31pm on Tuesday in Singapore, 70 per cent higher this year, after miners including Glencore shut some supply and demand rose. Glencore hasn't yet revealed plans to ramp up output at its mines, which remain critical to the outlook, Morgan Stanley said.
The key support for iron ore in 2016 has been the China's credit-backed, steel-intensive infrastructure programs, underpinning steel production, according to the bank. Next year, there will probably be an expanding surplus, even as the major miners underdeliver on supply growth, it said.
Morgan Stanley's outlook for 2017 chimes with other bullish calls on commodities including metals next year. Citigroup has predicted that most raw materials are expected to perform strongly next year as global economic growth picks up and the oversupply that's dogged markets finally dissipates.
Goldman Sachs said last month investors should bet on higher commodities prices as manufacturing picks up around the world, the first time the bank has recommended an overweight position for the asset class in more than four years. This month, the bank raised its copper forecasts.
http://www.afr.com/business/mining/iron-ore/morgan-stanley-bearish-on-iron-ore-bullish-on-base-metals-20161213-gtaj5t#ixzz4SmcvsJZp
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